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When you buy or sell real estate in Florida, it’s important to think about the kind of deed that will transfer the real estate.  There are many kinds of deeds in Florida. Here are a few of them:

• Statutory Warranty Deed. If you are the buyer, you generally want the seller to sign a statutory warranty deed because it means the seller makes various warranties to you. If the title fails, then you could sue the seller for breach of warranty. This is the type of deed that is usually prepared by lawyers and title insurance agents for closings in Florida. It is the type of deed specified in the form contracts issued by the Florida Realtors and The Florida Bar. But, there is no law that says it must be used.
• Special Warranty Deed. On the other hand, if you are the seller, you can limit your warranties by signing a special warranty deed instead of a statutory warranty deed.
• Fee Simple Deed. Even better, if you are the seller, you could sign a fee simple deed because it contains no warranties at all, but it still purports to convey fee simple title. 
• Trustee’s Deed. If you are a trustee, personal representative or guardian, then you want to sign a special type of deed for that capacity, which is similar to a fee simple deed and gives no warranties because it would obligate the trust, estate or guardianship beyond the term of your office.
• Quit Claim Deed. If you are not sure whether you really own the property, then you want to sign a quit claim deed. (Non-lawyers sometimes mistakenly call this a “quick” claim deed, but the correct name is quit claim deed.) Doing this means you quit claim your interest to the grantee, meaning that you only convey to the grantee whatever interest you have in the property. If you have no interest in the property, then you are conveying nothing.

The key is to specify the type of deed in the contract for sale, and to have your attorney read both the contract and the deed before you sign them. And it’s imperative that a title search and title insurance be obtained from a licensed title insurance company before you sign a deed.

Whether selling a home or an office building, the seller of Florida real estate needs a lawyer.  Why?  Because the seller has two goals: get paid and avoid litigation. The lawyer’s job is to help the seller get paid by preparing and negotiating the listing and sale contracts, helping the seller through the due diligence inspection period, and preparing or reviewing closing documents.  The real estate seller’s lawyer can do the following:

1. Clear Contract. Litigation is less likely with a clear contract, so the lawyer can assist in preparing and negotiating a clear contract for sale of the real estate.  Sometimes this is done with a standard form, such as the FR/Bar form issued by The Florida Bar and Florida Realtors or the FAR forms issued by the Florida Realtors. The lawyer often prepares addenda to these standard forms to clarify aspects of the transaction.  Sometimes, however, the lawyer prepares a form specifically for the particular transaction rather than using a standard form that has many provisions that are not applicable to the particular case or that are more favorable to the buyer.  Unlike others parts of the real estate sales team, lawyers are trained in the art and use of legal words and the drafting and interpretation of contracts.

2. Deadline Follow-up. All contracts for the sale of real estate should include deadlines for such matters as inspections, financing, title insurance, surveys, closing, etc. To avoid litigation, it is important to comply with these deadlines. The lawyer can assist the seller in scheduling contract deadlines in order to achieve the goals of getting paid and avoiding litigation.

3. Limit Liability in Contract, Deed and Closing Documents. Legal documents often contain representations and warranties that are binding upon sellers after the closing in a way that may obligate the sellers to pay damages to the buyers even years after the closing. Since the seller’s goals are to get paid (and stay paid) and avoid litigation, it is often important to limit the seller’s representations and warranties in contracts. Lawyers know which warranties and representations are standard and which are not, which can be negotiated out and which must stay.

4. Cashier’s Check or Wire Transfer at Closing. The seller should accept only a cashier’s check or a wire transfer of net proceeds at the closing. If the seller accepts a closing agent’s escrow check, then the seller accepts the risk if the check fails. While most closing agencies are reputable, there is no way to tell whether its escrow check will be honored by your bank.  If it is not, the seller loses and the buyer gets to keep the deed. So, it is essential that the seller only accept a cashier’s check or wire transfer at closing.

Therefore, the seller of Florida real estate, whether it is residential or commercial, should always engage a Florida lawyer to assist in the transaction.

When buying real estate in Florida, the buyer needs a lawyer. Why? Because real estate is complicated. There are many pitfalls. And there is usually no one else to watch out for the buyer’s legal interest. Brokers and closing agents usually aren’t lawyers. They are usually transaction agents who don’t represent either side. Only lawyers represent one side or the other. That’s because ethical conflict rules prohibit lawyers from representing both sides of a real estate sale. So, Florida real estate buyers need lawyers to provide legal advice and represent their side of the deal.

The lawyer can help the buyer prepare and negotiate a purchase contract, then advise the buyer through the buyer’s due diligence inspection period, and then read the deed, title insurance commitment, and other closing documents on behalf of the buyer. 

Specifically, the real estate buyer’s lawyer can do the following:

1. Due Diligence Period. The buyer’s lawyer can assist in preparing and negotiating a contract for purchase of the real property that includes a due diligence inspection period with broad wording to allow the buyer to check for obvious (patent) and non-obvious (latent) defects.  These might be in the building, land, air or water.  They could be environmental, structural, mechanical, electrical, or otherwise. The buyer might remember the Latin saying, Caveat Emptor, which means “Let the buyer beware.”  This meant that the seller was not obligated to tell the buyer about defects known by the seller.  While this ancient rule of law has changed with regard to residential real estate, it still applies in Florida to commercial real estate, so it is even more important for commercial real property buyers to do their due diligence inspections.  However, it is still important for residential buyers to inspect for defects because sellers are not obligated to tell about defects that sellers are not aware of so the buyer might discover something unknown to the seller.  In addition, if the residential seller fails to disclose a known defect and is liable to the buyer for not doing so, the seller might not have enough money left to pay the buyer damages for the nondisclosure. If the buyer does not discover the defect until after the closing, then it is too late to back out of the transaction without expensive litigation.

2.  Clear Contract. The buyer’s lawyer can assist in drafting a clear contract that gives the buyer what the buyer expects to buy in the transaction. Sometimes this is done with a standard form such as the FR/Bar forms issued by the Florida Bar and Florida Realtors or the FAR forms issued by the Florida Realtors. The lawyer often prepares addenda to these standard forms to clarify aspects of the transaction on behalf of the buyer that might otherwise be unfavorable to the buyer. Sometimes, however, the lawyer prepares a form specifically for the particular transaction rather than using a standard form that has many provisions that are not applicable to the particular case. Unlike real estate brokers, lawyers are trained in the art and use of words and the drafting and interpretation of contracts.

3. Deadline Follow-up. All contracts for the purchase of real property should include deadlines for such matters as inspections, financing, title insurance, surveys, closing, etc. To avoid breaching the contract, it is important to comply with these deadlines. The lawyer can assist the buyer in scheduling contract deadlines.

4. Read Closing Documents and Include Protections. Legal documents can be written to include representations and warranties that are binding upon sellers after the closing in a way that may obligate them to pay damages to the buyer even years after the closing, but sellers try to avoid this wording so that any discovered defects are the buyer’s sole problems. If the buyer does not have an attorney the buyer may not have the benefit of including this wording in the contract, deed and other documents.  Since the seller’s only goals are to get paid (and stay paid) and avoid litigation, it is important to include seller’s representations and warranties in contracts and deeds. Lawyers know which warranties and representations are standard and which are not, which can be negotiated in and which are more difficult to include.

5. Cost-Benefit of Legal Advice. The benefits of having a lawyer come at a cost: legal fees. Buyers who do not have lawyers do not pay legal fees; at least, not unless or until a breach or defect is discovered. Legal fees in litigation are expensive because it is fueled by opposing parties with opposing claims and positions. Legal fees paid to a buyer’s lawyer to advise the buyer before signing a contract to purchase and before closing on the contract are much less than legal fees in litigation. There is no crystal ball to determine in advance whether a particular deal will result in litigation so it is best to hire a lawyer to assist in assessing and minimizing the risks of the purchase transaction to the extent possible.

Therefore, the buyer of Florida real estate, whether it is residential or commercial, should always engage a Florida lawyer to assist in the transaction. Otherwise, there is really no one on the buyer’s legal side.